Square Generates 9.7% Yield on Bitcoin Holdings via Lightning Network

Coin WorldThursday, May 29, 2025 10:34 am ET
1min read
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Square, the payment platform owned by

Block
, is generating a 9.7% yield on its bitcoin holdings by operating a node on the Lightning Network. This
revelation
was made by Block's Bitcoin product lead, Miles Suter, during an appearance at Bitcoin 2025 in Las Vegas. Suter emphasized that the firm is achieving "real bitcoin returns from our corporate holdings...by efficiently routing real payments across the Lightning network."

The yield is generated through Square's Lightning service provider, which was established two years ago to enhance liquidity and efficiency on the Lightning Network. Ryan Gentry of Lightning Labs described Suter's announcement as "the biggest news" at the event, estimating that Square's 9.7% yield could amount to around $1 million annually.

For many years, the Lightning Network, a layer-2 solution for Bitcoin, was celebrated for its potential to address Bitcoin's scalability and speed issues by enabling micropayment channels that process transactions off the main blockchain. However, some of these hopes have diminished due to challenges such as the need for inbound liquidity, where users must commit BTC to receive BTC. This requirement can deter smaller-scale nodes, posing a barrier to decentralization.

Despite these challenges, Square views the Lightning Network as crucial to its strategy for accelerating the adoption of Bitcoin payments. According to Suter, one in four of Square's outbound Bitcoin payments are now processed on the Lightning Network. The company is currently piloting Lightning-based payments at Bitcoin 2025, with plans to expand the service to all eligible Square sellers in 2026.

Suter highlighted the transformative potential of the Lightning Network, stating, "When you enable real payments by making them faster and more convenient, the network gets stronger, smarter, and more useful." He further asserted that Bitcoin is not just an asset but also a protocol, and Block is leading the effort to make it the world's best payment system.

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